Why are Latin American fintech startups so attractive in the global entrepreneurship landscape?
The increase in easily accessible and scalable technologies, and an increase in mobile technology consumers, would be the reasons for the rise of this type of enterprise.
Fintech companies are revolutionizing the way of understanding, creating and providing financial services in modern times, providing new ideas and renewing the traditional formula of the sector through the use of information technologies, mobile applications and big data.
In this race to create innovative financial products, Latin America has not been left behind and has shown itself as fertile ground. In recent years, Latin American fintech entrepreneurship has grown by 60% and attracted the attention of investors and international corporations: Mexico, Brazil and Colombia top the list of countries with startups dedicated to the sector. Others like Argentina, Chile and Ecuador have recently joined. And these figures are not static, since 2018 they have grown exponentially and attracted the attention of foreign players (such as Silicon Valley accelerators and investment funds).
Why? These companies are imposing a new way to improve financial services solutions, which has made them very attractive. Their proposal is complete, modern and comprehensive: they have an innovative way of offering services, add value and eliminate intermediaries between the product and the user, in addition to performing the current services offered by the sector in a more efficient way –at cost level–. This generates more access to financial products and greater transparency in the offer.
The explosion of fintech startups in Latin America
In addition to all these qualities, the explosion of Latin American fintech startups is largely due to an increase in scalable and easily accessible technologies (allowing founders to test their ideas more quickly and affordably), there is an increase of mobile technology consumers, a cross - border market, and healthy competition so far.
The same is assured by Josef Scarantino, Senior Manager of the Techstars & Western Union acceleration program, who adds that the financial technology ecosystems in Latin America are unique compared to other regions of the world thanks to the entrepreneurs in the sector. Scarantino explains that they have a deep understanding of their own culture and geopolitics, as well as being incredibly generous and service minded.
Josef Scarantino, Senior Manager of the Techstars & Western Union acceleration program. Photo: Courtesy
Added to these characteristics is the environment in which fintech companies are developing: in Latin America they are beginning to be a great solution to financial problems such as the lack of credit alternatives for the average consumer and the informal economy. In addition, people tend to distrust financial institutions and their local government, so there is still a heavy dependence on cash.
The scenario of Latin American Fintech shown disruptive startups and is generating a lot of changes, which promises greater participation of entrepreneurs in the sector. “My advice to startups in this sector would be to build your network, be strategic about your short- and long-term needs, take advantage of the large open networks that extend to the United States and the rest of the world, and keep your mind open. That they connect with other entrepreneurs, because we are never alone. We are in this together, ”says Josef Scarantino.
The Techstars & Western Union acceleration program, of which Scarantino is Senior Manager, is focused on supporting the development of fintech startups, and this year it has a completely remote version. Among its objectives is to evaluate the challenges that participating startups are experiencing, and to work with dynamic and proactive entrepreneurs who are not afraid to show their vulnerabilities, key to success.
All early stage fintech startups in Latin America can apply to this program that is developed with mentors and in 13 weeks. Applications are open until April 7. For more information, you can visit: Techstars & Western Union Accelerator or contact Josef Scarantino at email: email@example.com